Kraken Adds Several Ethereum Options

News and Analysis
11.05.2016

Kraken, one of the world’s biggest cryptocurrency exchanges, has announced today it would offer its customers so-called Ether Dark Pool trading, which, as the company’s blog post explains, “allows clients to discreetly place large ether orders without exposing their intentions to the public, lit order book.”

Kraken claims to be the first and only exchange to offer such service.

“Kraken is proud to be the first exchange to provide clients with a Dark Pool for ether, a strategic option for professional traders. This year, trading volume for ether has dramatically increased on Kraken’s exchange, and we developed the Ether Dark Pool to bridge the gap between our lit order books and over-the-counter desk. Dark Pool trading allows for orders to be placed out of sight so that traders can make large buy or sell orders (minimum of 50 bitcoin or 2,500 ether) without revealing their sentiment to other traders. Advantages include reduced market impact and better price for large blocks,” said Jesse Powell, Kraken CEO.

“Kraken clients will now have access to 6 ether dark pool currency pairs, with the option to exchange ether for bitcoin (ETH/XBT.d), euro (ETH/EUR.d), United States dollar (ETH/USD.d), Canadian dollar (ETH/CAD.d), pound sterling (ETH/GBP.d), and Japanese yen (ETH/JPY.d). As with other Kraken dark pools, the Ether Dark Pool trading fees range from 0.20% to 0.36%, depending on trade volume,” Kraken blog post further explains.

The move also signifies expanding interest to Ethereum, whose tokens, Ethers, have drawn much attention as an investment asset, mostly because of its exchange rate’s skyrocketing behavior. Ether trading has been added by several prominent exchanges, including Bitfinex, Uphold, and Japan’s biggest cryptocurrency exchange Coincheck.

Additionally, Kraken has announced they introduce “major enhancements” to their Margin Trading program, which include increased leverage for ETH/XBT and support to three new pairs, namely ETH/EUR, XBT/USD and ETH/USD, all with up to threefold leverage. The exchange also stated that Ether would be a collateral currency, which enables customers to use ETH balance as collateral for advanced funds tied to a leveraged margin trade.

However, the exchange stressed that margin trading is currently unavailable to U.S. residents.

“There are two important takeaways when it comes to dark pool and margin trading. If traders are looking to move large sizes without affecting the market, they trade dark on Kraken. If traders want to keep fewer assets on account and they want less exposure to funding delays, they trade with margin on Kraken. These services together with our OTC desk reflect the growing professionalism of our client base and our exchange,” Powell said.

Earlier this month, Kraken announced that it had been selected as a key supplier of market data for reference and real-time bitcoin price indices that will be launched by CME Group, joint operator of the S&P 500 and Dow Jones Industrial Average and one of the world’s largest options and futures exchanges.

Kraken has been immensively active this year. Thus, in April, it announced it had raised significant funds during Series B investment round from a Japan-based currency brokerage company Money Partners Group. Parties did not disclose details of the deal, so the exact amount of the investment is unknown. Earlier thus January, Kraken acquired New York-based exchange Coinsetter and Canada-based platform CAVirtex. Back then, Kraken claimed the merger one of the biggest in bitcoin’s history. A short while later, a new multimillion deal was announced – this time it involved SBI Investment, a major venture investment company that had secured the California-based exchange’s second investment round. SBI Investment is the investment wing of SBI Holdings, a major Japanese financial conglomerate handling the operating income of around $570 million with operating revenue in excess of $2 billion in 2015 alone.

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